PPT-Indifference

Curve Analysis ASSUMPTION OF INDIFFERENCE CURVE ANALYSIS 1 A consumer is assumed to buy any two goods in combinations 2 A consumer can rank the alternative combinations and compare their level of satisfaction and he prefers a combination providing a higher level of satisfaction. Indifference curves . Chapter 3. Budget line. 2. Points on the budget line indicate all the bundles of goods that the consumer can afford.. Good 2. 150. 50. 100. Good 1. 150. 100. 0. 50. Indifference Curve. Chapter 3. Chapter Outline. The Opportunity Set or Budget Constraint. Budget Shifts Due to Price or Income Changes. Consumer . Preferences. The Best Feasible Bundle. Appendix: . The . Utility Function Approach to the Consumer . Topic 3. Outline. Concepts—definition/illustration. Indifference map. Slope of indifference Curve/MRTS. DMRTS/reasons. Assumptions of Indifference curve. Properties of Indifference Curve. Budget . line. www.lancaster.ac.uk/postgrad/murphys4/. s.murphy5@lancaster.ac.uk. office: LUMS . C85. Outline for this week’s tutorial. Past exam question ( from last week) – 5 min.. Question 1 – 2 min.. Question 2 – 3 min. . patterns of arts attendance in England April 2008 Catherine Bunting, Tak Wing Chan, John Goldthorpe, Emily Keaney, Anni Oskala Members of the ‘Now and then’ group are more likely to attend Ms. Parra 2012. stifle. verb. To suppress, curb or . withold. capitulation. Noun. The act of surrendering, giving up resistance. vital. Adjective. Necessary to life. quarrel. noun. an . angry. fight or disagreement.. And the impossibility of utility maximisation. From indifference…. Concept of subjective utility dates back at least to Aristotle; made central tenet of economics and philosophy by Jeremy Bentham (. Part I. CONSUMER THEORY. Laura Sochat. Budget constraint I. Income is one of the factors affecting the quantity demanded by consumers. . I like to spend money on food and on clothes. Assume they cost £5/g and £10/unit respectively. Also assume that my weekly income is £200.. 3.1 Consumer Preferences. 3.2 Budget Constraints. 3.3 Consumer Choice. 3.4 Revealed Preference. 3.5 Marginal Utility and Consumer Choice. 3.6 Cost-of-Living Indexes. Consumer Behavior. ●. . theory of consumer behavior . What is “Indifference”? . indifferent: . 1 having or showing no partiality, bias, or preference; neutral 2 having or showing no interest, concern or feeling; uninterested, apathetic, or unmoved. .. Consumer Choice. Postulate: . an unproved and indemonstrable statement that should be taken for granted: used as an initial premise or underlying hypothesis in a process of . reasoning. Consumer choice postulate: People choose from available options to maximize their well-being (utility).. Consumer theory. Key concepts. budget constraint: the choices a consumer can afford.. indifference curves: a representation of a consumer’s preferences.. a consumer’s optimal choices.. a consumer’s responses to changes in income and changes in prices.. So what!. Awesome!. This is a picture of my cat. Indifference. Interest. Expressing interest. Expressing indifference. How interesting!. Wow! That sounds exciting!. Awesome!. How great!. That is amazing!. Objectives: . Upon completion of this unit students should be able to;. Define the concept of utility as basis of demand.. Define Marginal utility and diminishing marginal utility.. Draw indifference curve and individual demand curve..